TIDMQED
RNS Number : 3245C
Quadrise PLC
12 June 2023
12 June 2023
Quadrise Plc
("Quadrise" or the "Company")
Valkor Site License & Supply Agreement
Quadrise Plc (AIM: QED), the supplier of innovative energy
solutions for a cleaner planet, is pleased to announce the
signature of a Site License and Supply Agreement ("SLS Agreement")
with Valkor Technologies LLC ("Valkor") in respect of the use of
Quadrise's MSAR(R) and bioMSAR(TM) technology at a Valkor heavy oil
asset in Utah, USA (" Primary Project Site") .
The original Commercial Development Agreement ("CDA") between
Quadrise and Valkor, announced on 11 April 2022, defined the joint
intent to complete commercial scoping to deploy Quadrise's
technology at the Primary Project Site in which Valkor holds an
equity interest ("Phase 1") and then to license Quadrise's
technology to Valkor on a conditionally exclusive basis, with
Quadrise providing services, additives and technical support for
production and use of MSAR(R) and bioMSAR(TM) fuel in energy
applications ("Phase 2").
Quadrise and Valkor have progressed Phase 1 to mutual
satisfaction and, having identified the preferred Primary Project
Site managed by Valkor, the parties have now signed the SLS
Agreement for the licensing and supply of MSAR(R) and bioMSAR(TM)
technology at the Primary Project Site .
Subject to the satisfaction of the conditions of the SLS
Agreement described below, commercial revenues for Quadrise could
be achieved from Valkor's Primary Project Site in August 2023. This
would achieve a significant corporate milestone in providing the
first commercial licence supply for the Company's technology.
The SLS Agreement comprises four sub-agreements, with the key
terms of each as follows:
-- Site Licence Agreement which is conditional on, inter alia,
receipt by Valkor of drilling and underground injection permits for
the Primary Project Site from the Utah Board of Oil, Gas and Mining
at a hearing scheduled for August 2023, and the receipt by Valkor
of project financing in an amount of at least US$15 million for the
Primary Project Site . Quadrise has granted Valkor the exclusive
right and licence to use its technology at the Primary Project Site
to produce MSAR (R) and bioMSAR (TM) and to market the fuel on a
non-exclusive basis in Utah. In exchange, Valkor will pay Quadrise
US$1.5 million, with US$1.0 million payable on satisfaction of the
conditions set out above and a further US$0.5 million on the date
on which a Quadrise MSAR (R) Manufacturing Unit ("MMU") is
delivered to the Primary Project Site.
-- Technology Transfer and Purchase Option Agreement ("TTPOA") ,
under which, following Valkor's receipt of the MMU, Quadrise agrees
to provide engineering and process design and commissioning
services, site operations and compliance support and project
development support services for a minimum period of two years, and
for which Valkor will pay Quadrise an additional quarterly retainer
of US$75,000, after which , Valkor will have an option to purchase
Quadrise's technology and MMU for the primary project for US$1.0
million at which point the TTPOA will terminate (the "Purchase
Option").
-- Equipment Supply Agreement , which sets out the terms under
which Quadrise will supply a 40 tonne per hour MSAR (R) MMU and
ancillary equipment necessary to allow the production of MSAR (R)
and bioMSAR (TM) at the Primary Project Site after receipt of
initial payment. Under the TTPOA, this supplied equipment will be
owned and operated by Quadrise until the Purchase Option is
exercised, whereby ownership would transfer to Valkor.
-- Surfactant Supply Agreement , which covers the terms under
which Quadrise will supply to Valkor the chemicals needed to
manufacture MSAR (R) and bioMSAR (TM) under the TTPOA, and
subsequently .
Under the SLS it is envisaged that both parties may need to
commit resources to additional project advancement activities with
third parties to supply MSAR (R) and bioMSAR (TM) and Quadrise
technology. A profit share mechanism has been agreed under the SLS
based on a pro-rata contribution of each party's costs and time to
achieve sales of MSAR (R) and bioMSAR (TM) at a premium to heavy
oil sales at the Primary Project Site . The SLS Agreement has a
term of ten years and may be terminated by mutual consent.
In addition to the signature of the SLS Agreement, a non-binding
Heads of Agreement has also been entered into between the parties
which, in complementing the SLS Agreement, also sets out the basis
on which Quadrise and Valkor will seek to agree a conditionally
exclusive Sub-License Agreement to be granted to Valkor covering
the state of Utah, as well as the terms on which the net profit
generated under the SLS Agreement, and a future Sub-License
Agreement, will be shared between Quadrise and Valkor.
Jason Miles, CEO of Quadrise commented:
"We're delighted to move on to this exciting new phase of
collaboration with Valkor and to have signed this conditional Site
License and Supply Agreement. We both share the vision that the low
sulphur, lower carbon MSAR(R) and bioMSAR(TM) fuels that will be
produced in Utah from heavy sweet oil will offer compelling
solutions for clients across the industrial and marine sectors as
the pace of decarbonisation advances. "
Steven Byle, CEO of Valkor added:
"Investment conditions in the USA are favourable for energy
decarbonisation technologies and growth projects. We are therefore
very pleased to have finalised our discussions with Quadrise and
look forward to using their unique technology in order to produce
cheaper, cleaner, lower carbon fuels at our sites in Utah as soon
as possible to meet the increasing demands from our various heavy
oil projects."
For additional information, please contact:
Quadrise Plc +44 (0)20 7031 7321
Andy Morrison, Chairman
Jason Miles, Chief Executive Officer
Nominated Adviser
Cenkos Securities plc +44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Joint Brokers
Shore Capital Stockbrokers Limited +44 (0)20 7408 4090
Toby Gibbs, Rachel Goldstein (Corporate
Advisory)
Fiona Conroy (Corporate Broking)
VSA Capital Limited
Andrew Raca (Corporate Finance)
Andrew Monk (Corporate broking) +44 (0)20 3005 5000
Public & Investor Relations
Vigo Consulting
Patrick D'Ancona
Charlie Neish +44 (0)20 7390 0230
About Quadrise
Quadrise is the supplier of MSAR(R) and bioMSAR(TM) emulsion
technology, fuels and biofuels, providing innovative solutions to
reduce energy costs and greenhouse gas emissions today for clients
in the global power generation, shipping, industrial and refining
industries.
Learn more at: www.quadrise.com
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
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